Folklore has it that gambling businesses do well in times of war. But the 1991 Gulf War contradicted that. Las Vegas, gaming's world capital, suffered a severe downturn then. Vegas watchers fear the same this time.

'People are apprehensive to board planes and there's a moral dimension,' said Professor Bill Eadington of the University of Nevada, one of the world's top gaming specialists. 'People may feel some disquiet engaging in frivolous activities like gambling.'

The attacks on the US came during what is normally the most lucrative quarter for some of the world's leading leisure companies, Park Place, MGM and Mandalay Resorts, which dominate Vegas. Their autumn revenues usually exceed $10 billion. This autumn they could be more than £1bn down.

In the UK casino operators said last week that they were unaffected, though they feared that fewer American tourists would mean a disappointing fourth quarter. Some expect an influx of Arab money. 'As the Middle East becomes more volatile, you traditionally see more Arabs riding out the storm in London,' said one.

But the most vulnerable businesses are wary of predicting the worst. 'It seems distasteful to be talking about a reduction of a few percentage points in hotel occupancy when people are looking for their families in the rubble,' said one commentator.

Nobody really knows how badly retail, leisure and tourism will be affected, or for how long. But there will be less spending in the shops, as early figures for last week confirmed.'We have only Diana's death and the Gulf War to compare this event to, and history is not reliable,' said Richard Hyman, director of retail research group Verdict. On Monday we we thought consumer spending would turn down before Christmas. Now I am sure of it.'

Consumer spending was already looking wobbly. Retailers from Argos' Terry Duddy to Gucci's new owners, Pinault Printemps Redoute, were ready for a softening. Hotels in London, heavily exposed to any cut in US visitors, had a dismal summer.

'Now is a time of deep uncertainty,' said Melvin Gold, head of hotel consultancy at leisure specialist PKF. 'It is far, far too early to tell what will happen next.'

The City has marked down stocks in hotel groups, although those of large retailers were holding up well.